Vistara signs agreement with Airbus for parts, engineering support

European aviation major Airbus said on Wednesday it will provide component support and repair to the A320 fleet of Vistara under its Flight Hour Services - Tailored Support Package (FHS-TSP).

The long-term contract inked with the domestic full service carrier will cover engineering and maintenance for 62 aircraft, including 23 existing ones, a release said.

Airbus Services combined aircraft engineering capabilities, expertise in maintenance operations and data analytics know-how will help Vistara to increase its competitiveness and secure its operations.

"This contract also reaffirms our commitment to expanding and deepening our Airbus Services footprint in India," said Remi Maillard, Head of Airbus Services.

Under the agreement, Airbus will offer its expertise in the areas of maintenance, engineering and supply chain management, among others besides ensuring timely availability of spare parts, their maintenance planning, compliance with airworthiness advisories as well as technical records on all aircraft, the aircraft manufacturer said in the release.

An on-site Airbus team will support the daily maintenance activities, including spares, warehousing and engineering to ensure the highest standards of aircraft technical dispatch and operations, it added.

"We are delighted to announce the partnership with Airbus to avail the advantages of their TSP programme,' said Sisira Kanta Dash, senior vice president for engineering, Vistara. 

As Boeing continues to struggle, Airbus fails to capitalise on market

With its main rival hobbled by the worldwide grounding of a top-selling jet, Europe's Airbus could seem poised to emerge as the undisputed global aerospace leader.

Airbus has overtaken the American giant Boeing in some key benchmarks in 2019. And the company is now better positioned to move quickly on a new jet product.

Meanwhile, the American company is mired in efforts to get its crisis-stricken 737 MAX planes back in the sky after two deadly crashes.

Still, experts say the Toulouse, France-based aviation giant faces production constraints that likely limit its ability to grab more market share.

"Airbus is a winner only at the margins," said Richard Aboulafia, a longtime industry analyst at the Teal Group, an aerospace market analysis firm.

To be sure, Boeing's suspension of deliveries of its top-selling plane has added luster to Airbus's solid and unscathed results.

Moreover, as the MAX grounding has dragged on since March, key airline customers are becoming increasingly blunt in expressing frustration.

Airbus delivered 389 planes through the end of June, an increase of 28 percent. During the same period, Boeing deliveries fell 37 percent to 239.

It was the first time since 2011 that Airbus overtook its US rival in plane deliveries, which is when the bulk of revenues are generated, effectively rendering Airbus the world's largest aircraft maker.

Airbus also has had net orders of 88 planes in 2019, compared with Boeing, which has seen a decline of 119.

At the Paris Air Show in June, Airbus announced orders for 383 planes worth $44 billion, about $10 billion more than Boeing's take from the show.

Still, a consolation prize for the US company was a letter of intent by British Airways parent IAG to buy 200 new 737 MAX planes, a vote of confidence in the aircraft.

Airbus is primed to move more quickly with commercializing a new mid-distance plane, launching the A321XLR in Paris this year, a single-aisle plane with greater range and passenger capacity of 240.

Boeing also has had a plan under development for a competing jet, but the timeframe has been pushed back because of the MAX.

But since the MAX crisis, Boeing has seen "no major cancellations of orders," said Aboulafia.

The Saudi budget carrier Flyadeal reversed a plan to purchase MAX planes but the deal had been provisional, aviation experts said.

Still, some plane contracts allow airlines to cancel the agreement without charge six months after a grounding. That means late September could be a telling juncture.

"That's when we'll know whether Airbus really has benefited from this tragedy," said Michel Merluzeau, an expert at Air Insight Research, an analysis firm and consultancy.

But even if airlines did want to shift to Airbus, they might have doubts about the European company's ability to deliver higher output.

Ramping up production in aerospace is a capital-intensive process that involves around five years of planning, Merluzeau said.

"I'm not sure Airbus's supply chain can sustain another increase in production," Aboulafia said.

"It will require additional investments, and we are talking about millions of dollars."

Airbus has struggled to keep up with some of its production targets due to difficulties at engine makers Pratt & Whitney and CFM International, a joint-venture of General Electric and Safran.

Airbus has said it expects output of MAX rivals under its A320 line to reach 60 per month in 2019 and 63 per month next year.